The city of Arroyo Grande will start negotiations with former City Manager Steve Adams for a severance package, the Arroyo Grande City Council decided at a special meeting Thursday night.
"The council has directed staff to begin negotiating the terms of resolution in the matter of severance for Mr. Adams," Interim City Manager Bob McFall said, a decision that came after two hours of discussion in closed session by the City Council.
McFall would not specify the terms to be negotiated, saying that staff would discuss "a range of options that (the council) has asked us to negotiate with."
Adams is requesting six months of severance pay plus benefits — totaling $107,000, according to McFall — in his claim that he was fired last year, and did not officially resign. If a decision is not reached on the severance package by next week, he’s threatened a possible lawsuit.
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As city manager, Adams earned $157,294 annually. In the two months since Adams was placed on paid administrative leave, the city has paid Adams $26,553.87 in gross pay, Administrative Services Director Debbie Malicoat told The Tribune previously, as well as an additional $54,219.51 for the annual leave balance he had accrued,
McFall would not comment on whether the severance package would be on top of the paid leave Adams has already received.
McFall said he planned to contact Adams and his legal counsel immediately following the meeting to set up discussions on the topic.
Confusion over the issue dominated public comment at the start of Thursday’s meeting, with most speakers asking why the issue of Adams' departure from city administration has been drawn out since the council accepted his resignation and placed him on administrative leave.
"You could terminate Mr. Adams tonight for behavior bringing shame, embarrassment and discredit to the city, not to mention financial cost to the city," Arroyo Grande resident Colleen Martin said. "We need a fresh start in Arroyo Grande, and that includes moving on from this."
Others at the meeting criticized City Attorney Tim Carmel, asking why the City Council was not advised against its original decision if it opened the city up to the risk of litigation.
"You are supposed to be looking out for the citizens," Arroyo Grande resident Patty Welsh said. "To put us in this position is not appreciated."
Adams, who spent 14 years as Arroyo Grande city manager, was the subject of public scrutiny last year, following a July incident in which Arroyo Grande police found him and a subordinate alone in City Hall late at night.
The incident prompted public backlash, and even an independent investigation. On Oct. 2, Adams announced his intent to resign in a statement emailed to the media and city council members.
On Nov. 19, the City Council decided to accept his resignation, and placed him on paid administrative leave until an interim city manager was hired. In phone interviews with The Tribune, city council members said that by the time they met in closed-session at the meeting, they had reached the decision that Adams could no longer effectively lead the city.
A month later, Adams and his attorney, Roger Frederickson, requested in a Dec. 29 letter that the city pay him six months of severance pay, including accrued benefits.
In the letter, Adams claimed the City Council prematurely accepted his resignation.
Adams claimed his resignation was contingent on the city hiring a permanent city manager successor, and that by accepting his resignation and placing him on leave before that was accomplished, the council had effectively fired him.
Adams’ contract states he is entitled to a severance package if terminated without cause, but not if he resigned.
In a follow-up letter to the city Jan. 14, Adams and Frederickson threatened legal action if a decision was not made on his severance package by Jan. 28.